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Dow (DOW) Q2 Earnings, Revenues Top Estimates on Higher Prices
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Dow Inc. (DOW - Free Report) swung to a profit (on a reported basis) of $1,932 million or $2.51 per share in second-quarter 2021, from a loss of $217 million 31 cents per share a year ago.
Barring one-time items, adjusted earnings were $2.72 per share for the reported quarter, topping the Zacks Consensus Estimate of $2.48.
Dow raked in net sales of $13,885 million for the quarter, up roughly 66% year over year. It also surpassed the Zacks Consensus Estimate of $12,659.8 million. Sales rose due to higher local pricing in all operating segments, businesses and regions on the back of tight supply and demand fundamentals. Dow saw a 53% year-over-year increase in local prices in the reported quarter. Prices also rose 16% on a sequential comparison basis.
Volumes rose 9% year over year on gains across the operating segments. Volume gains were led by polyurethane and silicones applications on a rebound in demand from the impacts of the pandemic. Despite continued supply disruptions stemming from the winter storm, the company saw higher demand in infrastructure, industrial and personal care end markets.
Packaging & Specialty Plastics: The division’s sales went up 78% year over year to $7.1 billion in the reported quarter on higher volumes and prices, and favorable currency impact. Volumes went up 4% on gains in olefins, coproducts, and elastomers while local prices jumped 70%. Currency increased sales by 4%.
Industrial Intermediates & Infrastructure: Sales for the unit climbed 74% year over year to $4.2 billion. Volumes rose 15% on demand strength in infrastructure, mobility and furniture & bedding end markets. Local prices rose 53% on the back of increases in consumer durable goods and appliances. Currency increased sales by 6%.
Performance Materials & Coatings: Revenues from the division went up 33% year over year to $2.5 billion. Volumes increased 13% while local price rose 16%. Currency increased sales by 4%. Volumes rose on a demand recovery in mobility, electronics and building & infrastructure markets.
Financials
Dow had cash and cash equivalents of $3,491 million at the end of the quarter, down around 6% year over year. Long-term debt was $15,093 million, down around 7% year over year.
Cash provided by operating activities from continuing operations was $2 billion in the reported quarter while free cash flow was $1.7 billion.
Dow also returned $722 million to shareholders in the second quarter through dividends.
Outlook
Moving ahead, the company said that it expects earnings momentum from additional improvements in consumer spending, industrial production and international travel. With the ongoing global economic recovery, it is well placed to continue to capture value with its differentiated materials science portfolio and participation in fast-growing markets, Dow noted.
Price Performance
Dow’s shares have gained 39.5% over a year, compared with a 28.1% rise recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Dow (DOW) Q2 Earnings, Revenues Top Estimates on Higher Prices
Dow Inc. (DOW - Free Report) swung to a profit (on a reported basis) of $1,932 million or $2.51 per share in second-quarter 2021, from a loss of $217 million 31 cents per share a year ago.
Barring one-time items, adjusted earnings were $2.72 per share for the reported quarter, topping the Zacks Consensus Estimate of $2.48.
Dow raked in net sales of $13,885 million for the quarter, up roughly 66% year over year. It also surpassed the Zacks Consensus Estimate of $12,659.8 million. Sales rose due to higher local pricing in all operating segments, businesses and regions on the back of tight supply and demand fundamentals. Dow saw a 53% year-over-year increase in local prices in the reported quarter. Prices also rose 16% on a sequential comparison basis.
Volumes rose 9% year over year on gains across the operating segments. Volume gains were led by polyurethane and silicones applications on a rebound in demand from the impacts of the pandemic. Despite continued supply disruptions stemming from the winter storm, the company saw higher demand in infrastructure, industrial and personal care end markets.
Dow Inc. Price, Consensus and EPS Surprise
Dow Inc. price-consensus-eps-surprise-chart | Dow Inc. Quote
Segment Highlights
Packaging & Specialty Plastics: The division’s sales went up 78% year over year to $7.1 billion in the reported quarter on higher volumes and prices, and favorable currency impact. Volumes went up 4% on gains in olefins, coproducts, and elastomers while local prices jumped 70%. Currency increased sales by 4%.
Industrial Intermediates & Infrastructure: Sales for the unit climbed 74% year over year to $4.2 billion. Volumes rose 15% on demand strength in infrastructure, mobility and furniture & bedding end markets. Local prices rose 53% on the back of increases in consumer durable goods and appliances. Currency increased sales by 6%.
Performance Materials & Coatings: Revenues from the division went up 33% year over year to $2.5 billion. Volumes increased 13% while local price rose 16%. Currency increased sales by 4%. Volumes rose on a demand recovery in mobility, electronics and building & infrastructure markets.
Financials
Dow had cash and cash equivalents of $3,491 million at the end of the quarter, down around 6% year over year. Long-term debt was $15,093 million, down around 7% year over year.
Cash provided by operating activities from continuing operations was $2 billion in the reported quarter while free cash flow was $1.7 billion.
Dow also returned $722 million to shareholders in the second quarter through dividends.
Outlook
Moving ahead, the company said that it expects earnings momentum from additional improvements in consumer spending, industrial production and international travel. With the ongoing global economic recovery, it is well placed to continue to capture value with its differentiated materials science portfolio and participation in fast-growing markets, Dow noted.
Price Performance
Dow’s shares have gained 39.5% over a year, compared with a 28.1% rise recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of 447.6% for the current year. The company’s shares have surged around 118% in a year.
ArcelorMittal has an expected earnings growth rate of 1,484.4% for the current year. The company’s shares have shot up around 174% in the past year.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have gained roughly 36% in the past year.